Due to the COVID-19 Pandemic and the Ontario Declaration of Emergency, the GENMO Annual General Meeting (AGM) that normally takes place in May has been postponed. We will reschedule it once the current government restrictions are lifted.

As well, during this time, GENMO will only be communicating via email.

Therefore, if you know members who do not have e-mail, please pass on this information to them. If they do have access to e-mail please ask them to send an e-mail to membership@genmo.ca so that we can add them to our e-mail communication list.

The GENMO Executive, in full agreement with the class representatives Lynn McCullough, of the O’Neill v. GMCL class action and Lea Jankowski, of the Jankowski v. GMCL and Ally Credit class action, have invoked the arbitration clause in our class settlement agreement to resolve two issues related to out of country travel benefits. These changes to our travel benefits by GM Canada were facilitated by the termination of OHIP’s coverage for emergency services outside of Canada.

Effective January 1, 2020 GM Canada imposed a 90 day stability requirement for existing or pre-diagnosed conditions. GM Canada also stated that the continuation of out of country benefits was an accommodation to retirees and would continue until further notice. GM Canada’s position is based on the language in the class settlement that travel benefits are only available if the relevant provincial plan makes a payment towards the cost of the medical expenses. As there is no OHIP coverage for out of country medical expenses GM Canada has stated that it is not required to continue to provide travel benefits. They are currently providing coverage as an accommodation only. We strongly disagree with GM Canada’s position in both these matters and have been trying to resolve it with them for many months.

GENMO’s legal counsel, Goldblatt Partners had written a letter to GM Canada on January 9 stating our opposition regarding the position announced by GM Canada in its letter to retirees dated Dec. 27, 2019. After many weeks of no response from GM Canada, Goldblatt Partners initiated arbitration proceedings on February 28, 2020on behalf of the two classes. GM Canada was also advised that as they had imposed these restrictions on retirees who retired prior to 1995, where there was no reservation of rights, that proceedings would be initiated on their behalf as well.

GM Canada responded via their counsel on March 4 that they had not seen our January 10, 2020 letter due to internal issues at their legal counsel’s office. They asked for additional time to consider the issues detailed in GENMO’s arbitration letter before proceeding. GENMO agreed to provide the extra time requested.

GM Canada responded on March 18, 2020. Unfortunately their position is that they will continue to impose a 90 day stability requirement for any pre-existing medical condition. Also they maintain that continued out of country coverage as an accommodation only is consistent with the class action settlements and is not required under the agreement.

GM Canada did state they remain open to discussing alternative solutions and that they are hopeful that this can be resolved without arbitration. Therefore, GENMO and the class representatives are left with a decision to make. We can either consider mediation as an interim step in the arbitration process to try to resolve these matters or proceed with an arbitration hearing to present its case to an independent arbitrator to rule on. It should be noted that an Arbitrator’s ruling would be final and binding and there would be no appeal. It has been decided that mediation should be pursued before an arbitration hearing and we will be advising GM Canada accordingly.

We trust you will support these undertakings as they proceed.

We want to reassure you that even during these times of the COVID-19 pandemic that your GENMO Board of Directors continues to work diligently on your behalf on matters of concern to our organization and its members. We are doing this is in a safe and distanced manner to ensure that we are not contributing to the spread of COVID-19.

Their new site includes a lot of relevant and informative features on defined benefit pensions including:

Summary of CFP’s national and provincial advocacy activities

Recent news coverage

Government Submissions (federal and provincial) dating back to 2017

Downloadable copy of their Defined Benefit pension brochure

List of CFP members with links to their websites (where available)

The CFP advocates on behalf of defined benefit pension plans like our General Motors Canada pension plan. The CFP is the united voice of 21 retiree groups, representing 270,000 defined benefit pensioners, who work together to improve pension security across Canada. CFP is also affiliated with CARP, FADOQ and the National Pensioners Federation.

The CFP has a long history of working collaboratively with provincial and federal government agencies responsible for pension regulation. Their active engagement at the federal and provincial levels includes pre-budget consultations, committee hearings, legislative consultations, stakeholder meetings, lobby days, media campaigns and face-to-face meetings with senior ministers and other elected and government officials

In today’s environment, especially with the coronavirus outbreak and its huge impact on the financial markets, protecting defined benefit pension plans is now more important than ever.

GM Canada has finally provided notification about retirees Out of Country health care coverage.

Feedback we have received indicates that most people will find it in their secure mailbox on www.gmcanadabenefits.com. GM Canada did not provide notification that this communication was in your secure mailbox, and it appears that it will be deleted after January 23, so please check and copy or print it. It is titled Subject: Emergency Medical Services While Travelling Outside of Canada, dated December 27, 2019 and delivered to your secure mailbox on December 24, 2019.

If you elected not to use the secure mailbox you may have received a letter from GM Canada. We have heard from some that haven't received anything.

We caution you that while this is a positive step, we have serious concerns and have engaged legal counsel.

Many will read " GM Canada is pleased to announce, as an accommodation to its retirees, that it intends to continue to offer emergency medical services coverage to retirees" as nothing has changed. Based on the letter there are several disconcerting changes.

First and foremost GM Canada again is attempting to add pre-existing condition limitations that GENMO contends were never there, specifically a 90 day stability requirement for existing or pre-diagnosed conditions. Significantly reducing the value and effectiveness of your coverage.

GM Canada also has inserted "until further notice" providing them the ability to unilaterally change or eliminate coverage. A key victory in our lawsuit was the court judgment that GM Canada could not reduce or eliminate our benefits.

As well GM Canada is not clear who is impacted. The Out of Country changes were in Ontario, GM Canada's memo is not clear that the changes they want to make (and we oppose) are limited to Ontario. As the GM letter was sent to retirees across the country it appears that the changes GM is making applies to all irrespective of their province of residence.

Finally, for Ontario residents, what is not addressed is who will be responsible for the portion of the medical expenses that were previously paid by OHIP.

As mentioned GENMO is working with legal counsel to respond and object to the changes GM Canada is attempting to make to our coverage.

GENMO was formed in 2009 as a non profit corporation. Together with our membership we have enjoyed several success stories in regards to our pension and benefits.

The seeds of our organization came from the Salaried Retiree Associations (SRAs) in Oshawa, St. Catharines, London and Ste Therese. Over the past several years we have enjoyed a close relationship with these organizations and depend on their support for the ongoing success of GENMO.

GENMO provides the business activities and the SRAs provide the social functions for the GMCL Salaried Retirees. Both activities are an integral part of the quality of our retirement lifestyle.

The Executive and volunteers of the SRAs provide monthly meetings with interesting guests and presentations as well as social activities such as golf tournaments, ballgames, theatre and Christmas dances.

GENMO and the SRAs have a symbiotic relationship; we need each other. Please take advantage of the activities that your local SRAs offer and continue your support or join as a new member.

Mike Powell, GENMO and Canadian Federation of Pensioners President, speaking to Minister of Finance Bill Morneau. "Full pension protection in insolvency is the goal and we, CFP, CARP, and the National Pensioners Federation have put forward three options to accomplish it. We are still waiting for a single proposal to fully protect pensions in insolvency from either the pension industry or the federal government."

April 21, 2019 francais ci-inclus

CARP Membership Offer

As a member of GENMO you are being offered this special opportunity to receive a free 2 year membership to CARP. If you are already a member of CARP then your membership will be extended for an additional two years. This opportunity is being made available to our members due to GENMO’s membership in and support of the Canadian Federation of Pensioners who in turn are an affiliate of CARP. Our organizations all share a common goal of securing pension security and advocating for the protection of defined benefit pensions.

By clicking here, you will be taken to the CARP landing page where you will find more information about CARP as well as its free membership offer. At the bottom of the landing page you will find the enrollment. You will need to select “GENMO” in the roll down box to start the sign-up process.

We would strongly urge you to take advantage of this gracious offer from CARP, enjoy the benefits of membership in their organization and support our common interests.

You (and your spouse) are invited to attend the tenth GENMO “Annual General Meeting” (AGM) to be held at the REGENT THEATRE (50 King St East) in downtown Oshawa at 2:00 PM on Thursday, May 2, 2019. The doors will be open at 1:00 PM for a meet and greet. Refreshments will be served.(francais ci-inclus)

There is a municipal parking garage at King and Mary.

The agenda will include the GENMO financial statements, membership drive, pension status and political action update.

Since the conclusion of the O’Neill vs. GMCL law suit, we assumed that all of our benefit issues were behind us. However, we learned this year that Green Shield changed our “out of province” health coverage, by adding a 90-day stability clause. This is in violation of the court approved settlement. We have been working with our lawyers, requesting GMCC ensure that Green Shield restores the out of province health benefit by removing the 90-day stability clause.

We remain concerned about our underfunded pension. The fund is on course to 100% solvency based on latest Actuarial Valuation (AV) and GM continues to make required contributions. However, with the eminent Oshawa plant closing and GMCC making the advance pension plan payment we are concerned about their future intentions.

We will provide updates on both of these issues at the meeting.

As per our bylaws, four GENMO Directors positions are up for re-election. Directors Tom Laurie, Garry Marnoch, Jan O’Neal and Brian Rutherford, have chosen to stand for re-election. If you wish to stand for election or nominate someone, please see the attached nomination form and be sure to mail it by April 20, 2019.

If you cannot attend and wish to vote by proxy, a ballot is attached (please press here) and may be mailed or brought to the meeting. It is to be used by a current GENMO member whom you appoint to carry out your wishes at the AGM. All candidates’ names will be posted on the home page of the GENMO web site by April 25, 2019. If there are no other candidates the current executive will be acclaimed.

The presentations will be followed by a question and answer period. Questions may be sent to info@genmo.ca or GENMO, PO 82555, Oshawa ON L1G 7W7.

One of the inquiries that GENMO receives from time to time involves letters that members have received in regards to their pension eligibility. These letters request that the recipient respond to the letter by a certain date or their pension will be discontinued. We want to make you aware that this is a normal part of GM Canada’s ongoing pension audit process. In addition, there have been situations where the retiree has not received this letter due to their being away on extended travel. This can become very problematic for the retiree.

In order to try to address this matter GM distributed a newsletter to retirees in 2017. The bulletin contains information on how you can update your GM Canada Benefits account to provide a temporary mailing address while you are away. This will to help ensure that you continue to receive their correspondence. As well, you can add an alternative phone number and email address to your account. To access this “Snowbirds Bulletin”, please press here.

It should be noted that when you provide an alternate temporary address all mailings from the GM Benefits Centre will be sent to the temporary address. This includes income tax slips and documents as well.

We recommend that you keep your GM Benefits account up to date with your current contact information.

You have probably heard by now that General Motors is announcing the closing of its Oshawa assembly plant which will cease operation sometime during 2019. This is part of a global transformation that will also see the closure of two assembly plants in the US as well as an additional two plants outside North America in 2019.

You are probably wondering how this announcement will affect salaried retirees. The short answer is that in the immediate future it will not. Your pension and benefits should not change. It should be noted that as of December 2017 the salaried pension was funded at 94.9% on a solvency wind-up basis and has shown ongoing improvement.

Two years ago Steve Carlisle (GMCC President) told GENMO in a meeting at Canadian Headquarters that all salaried legacy costs were funded by vehicle sales in Canada. Manufacturing was not a factor.

GENMO is arranging a meeting with GMCC to discuss our future. When we receive more information you will be advised by GENMO.

Please do not be overly concerned at this time; but if we find that GMCC is changing the landscape, be prepared to support GENMO in a struggle to protect what you worked for and were promised by the company, your pension and benefits.

This past year has been quite busy for GENMO. Our new area representatives in Alberta and Windsor are Mike Trigiani and George Fairbairn respectively plus Christine Thomas for GMACCL. Mary Douglas did a wonderful job in Windsor and will be missed. To date, we have had 105 board meetings plus eight Annual General Meetings since inception in 2009 plus numerous other meetings. We also hold information meetings (mini-AGM’s) at St. Catharines, London and Windsor on a frequent basis. This attests to the dedication and professionalism of your board.

Brian Rutherford and Mike Powell have leadership roles in the Canadian Federation of Pensioners (CFP) with Mike leading political action efforts for both GENMO and the CFP. Mike is also the president of the CFP. GENMO has contributed $5 per member to a CFP fund which is used to pursue their stated goal which is to actively promote the interests of defined benefit pensioners and advocate on their behalf for changes to federal and provincial legislation. We have signed a memorandum of understanding with the CFP for approved uses of this $15,000. Mike has participated in panel discussions regarding pensions and has been on Zoomer radio offering his take on bankruptcy legislation. Mike wrote an op-ed letter regarding the Sears bankruptcy which was published in the Globe and Mail.

GENMO, through its affiliation with the CFP, has been involved with the Canadian Association of Retired Persons (CARP) and its organization of the National Day of Action targeting Liberal MP’s across the country, a petition and a meeting with Liberal MP’s in Ottawa in an effort to improve pension security. This has led to recognition in the 2018 Federal Budget of the need to address retirement security.

We have made the membership aware of the condition of our pension plan as of the December 31, 2016 actuarial valuation (AV). The actuarial firm Willis Towers Watson made a presentation to our Board at CHQ regarding this AV. We are hopeful of another meeting with GM to discuss the new one when available. Two members of our group meet several times per year with GM to discuss the performance of our pension plan’s assets. We met with the Unifor Director of Pensions and Benefits regarding common issues with the hourly and salaried pension plans, specifically underfunding and the Pension Benefit Guarantee Fund.

We have developed a good working relationship with GM with respect to the issues brought forward by retirees. Examples include individuals whose benefits have been cut off because the Benefit Centre couldn’t contact them, incorrect tax statements in Quebec and others. They have been very receptive and have been cooperative in making corrections.

The GMACCL retirees benefited from our benefit class action as their benefits were upgraded to our level with the same terms in June, 2017. We still can’t understand why GM had them excluded from our class action since we have the same pension plan and had identical benefits.

We received legal opinions on the two Federal bills to provide super priority for pension plans and also on Ontario Bill 177 which unfortunately allows reduced solvency funding of pension plans. We also sought advice on how we might regain coverage under the Pension Benefit Guarantee Fund for GM retirees as we have been deemed ineligible for its protection since 2009.

GENMO and the CFP will be approaching all Ontario political parties to determine their level of support for various pension issues. The results will be published in May.

Thank you for your support. We will continue efforts to protect our pensions and benefits.

You (and your spouse) are invited to attend the ninth GENMO “Annual General Meeting” (AGM) to be held at the REGENT THEATRE (50 King St East) in downtown Oshawa at 2:00 PM on Thursday, May 10, 2018. The doors will be open at 1:00 PM for a meet and greet. Refreshments will be served.

There is a municipal parking garage at King and Mary.

The agenda will include the GENMO financial statements, membership drive, pension status and political action update.

Since the conclusion of the O’Neill vs. GMCL law suit, we assume that all of our benefit issues are behind us.

We are concerned about our underfunded pension. Even though GMCC is making all of its legally obligated contributions, it is not on a path to be 100% funded.

As per our bylaws, four GENMO Directors positions are up for re-election. Four of our directors have chosen to stand for re-election. If you wish to stand for election or nominate someone, please see the attached nomination form and be sure to mail it by April 25, 2018.

If you cannot attend and wish to vote by proxy, a ballot is attached and may be mailed or brought to the meeting. It is to be used by a current GENMO member whom you appoint to carry out your wishes at the AGM. All candidates’ names will be posted on the home page of the GENMO web site on May 1, 2018. If there are no other candidates the current executive will be acclaimed.

The presentations will be followed by a question and answer period. Questions may be sent to info@genmo.ca or GENMO, PO 82555, Oshawa ON L1G 7W7.

Three years ago few people believed we could get pension protection on the federal government's radar. After all, no substantial changes followed the Nortel insolvency in 2009 despite many efforts including a well-intentioned, but fatally flawed, private members bill put forward by the NDP.

Rather than giving up we took a hard look at our strategy, tactics and message. As a result we established a strategy to narrow our focus and broaden support by working with other organizations. Our message became "extend super-priority status to the pension deficit". We knew we would face significant opposition from the finance industry and government so we initiated ways to bring pressure to bear on politicians. We took our strategy to other organizations like the Canadian Federation of Pensioners, CARP, the Canadian Labour Congress and Leadnow.

Thanks to your support and your willingness to get involved we have made significant progress. Although we’re a long way from success we have moved this issue into the public eye and captured the attention of federal politicians and the federal government. You have played a key role by contacting and meeting with politicians.

The evidence is in this excerpt from the recently announced budget:

“Protecting Canadians’ Pensions

In recent years, we have seen companies, such as Sears Canada, entering the insolvency process with substantial unfunded pension liabilities. As a result, workers and pensioners, who have paid into pension plans over their careers, are faced with unexpected financial losses that impact their retirement security.

All Canadians deserve more peace of mind when it comes to their retirement and companies must act in good faith towards their employees. At the same time, we recognize the challenges facing courts as they try to maximize recovery in bankruptcies that affect not just workers and pensioners, but also small businesses, lenders, and other creditors which are owed money. Our government is committed to finding a balanced way forward.

That’s why, over the coming months, we will be looking to obtain feedback from pensioners, workers, and companies. We will take a whole-of-government, evidence-based approach towards addressing retirement security for all Canadians.”

It is far from the commitment we would like to see, but the federal government is now clearly aware of how these insolvency and funding issues affect pensioners.

We occasionally have individuals question why they should be members of GENMO as we gained back most of our benefits and GM Canada seems to be doing well. The reality is pension security is dependent on the legislation that regulates pensions and insolvency. With your help we have made significant progress in protecting our pensions and the pensions of thousands of others. We will need your support to continue the effort.

The Canadian Federation of Pensioners has analyzed four options to protect pensions in insolvency (Companies' Creditors Arrangement Act and Bankruptcy and Insolvency Act). Our position is that extending super-priority status to the pension deficit is the best solution in terms of effect and feasibility.

An outline of the four and a very brief explanation is below.

Deemed Trust

Concept: Change the CCAA and BIA to make pension deficit a deemed trust.

Impact: Pension deficit would become the highest priority in insolvency ensuring pensions were fully funded.

Issues: This option would be very disruptive to the insolvency process and likely lead to increased commercial lending rates because it puts pension deficits ahead of all other creditors including the Debtor in Possession (DIP) lender. The DIP lender is the source of funds that allows a company to operate during the restructuring process.

Should pension deficits be granted deemed trust status, DIP lenders would restrict lending and likely result in more bankruptcies and fewer restructurings. Deemed trust needs to be considered because in the Indalex case the Supreme Court of Canada was very careful to rule specifically on Indalex, keeping the deemed trust option open.

A national pension insurance program

Concept: Establish a national pension insurance program funded by premiums charged to companies with defined benefit pensions.

Impact: The insurance program would cover any pension loss arising from insolvency.

Issues: An excellent solution that would be very difficult to implement.

The federal and provincial regulators would have to standardize pension regulations. For example today regulators have different definitions of fully funded. A national plan would likely be seen by the provinces as usurping their regulatory responsibility.

A new agency would have to be created to operate the insurance program. As this option would require the government to spending, it is unlikely to be able to be proposed as a private members bill, it would have to be government policy.

Restrict executive pay and dividends if the pension is not fully funded

Issues: A good solution that would be very difficult to implement. Numerous federal and provincial regulations would have to be changed. Business would likely see this as an intrusion, too much government involvement in private business.

A new agency would have to be created to ensure compliance. As this option would require the government to spending, it is unlikely to be able to be proposed as a private members bill, it would have to be government policy.

Extend super-priority to the unfunded pension liability

Concept: Change the CCAA and BIA to make extend super-priority to pension deficits. Current year normal pension contribution is already super-priority (Wage Earner Protection Program 2008/9).

Impact: Super-priority is a very high priority but lower than deemed trust. In the vast majority of insolvencies, the pension deficit would be settled, funded to 100% solvency. It is possible that there would not be enough assets to settle the super-priority items. This puts pension deficits equal to DIP funding that is normally granted super-priority status by the judge.

Issues: A good solution, easy to implement and generally opposed by the finance community.

The finance community has written papers based on a theory that elevating the priority of pension deficits in insolvency would lead to significant increases in general commercial lending rates (unsecured lenders would demand much higher rates, claims of an 80 basis point increase) and significant restrictions on DIP funding availability (resulting in more bankruptcies). We believe this theory traces back to a study done by Phillips, Hager & North in the aftermath of Nortel. It is, however, a theory that history has proven wrong.

Since that paper was written two events have occurred that should have triggered the results the theory predicted.

The Wage Earner Protection Program was implemented in 2008/9. It granted super-priority status to pension current year normal contribution and other employee compensation. It did not trigger the forecast results.

A better example is Indalex. On April 7, 2011 the Ontario Court of Appeal ruled that pensions were a deemed trust in their Indalex decision. At that point the legal precedence in Canada (at least Ontario) became pension deficits were deemed trusts, to be settled first in restructuring/bankruptcy, ahead of the super-priority we are seeking. That ruling stood until the Supreme Court of Canada overruled the Ontario court on February 1, 2013. For almost two years legal precedence was that pension deficits were deemed trusts. The financial industry didn't collapse, in fact there wasn't a ripple.

The fact that the Supreme Court of Canada, while rejecting the Indalex deemed trust argument, was very careful to preserve the possibility of a deemed trust argument also should trigger the forecast results and did not.

CFP Position on Pensions

Sears has ignited a firestorm of interest in the lack of pension security. Sears is not unique. Nortel, Wabush Mines, Indalex, Grant Forest products, and many others came before Sears. They all left pensioners with reduced pensions and created hardships that put taxpayers on the hook for increases in government social service costs.

Sears stands out because they were far more effective at paying owners billions, executives millions while leaving an underfunded pension behind. Worse still, Sears provides a great roadmap for other companies to follow. Unless the federal government takes action, it is only a matter of time until the next Sears.

Make no mistake. What these companies have done is legal. Companies are focussed on maximizing financial returns to the benefit of owners and executives. No one should be surprised, then, that companies take full advantage of existing legislation to meet their goals.

If we want different results, we need different legislation.

Pensions are deferred compensation. They are earned long before a company begins the spiral to restructuring or bankruptcy. Pensions are a commitment made by the company and regulated by governments.

The Canadian Federation of Pensioners position is that super-priority status should be extended to the pension deficit, placing pensions near the top for settlement under both the CCAA and the BIA. The Conservative government, obviously seeing an injustice, passed the Wage Earner Protection Program (WEPP) that granted super-priority to the current year (the year CCAA or BIA is filed) normal pension payments in 2008/9. Extending it to the entire pension is the logical next step.

Super-priority is not a perfect solution; in rare cases companies could enter insolvency without sufficient assets to fully fund the pension. It is, however, a good solution providing protection for the vast majority of pensioners, providing that protection for Canadians across the country and, as it follows WEPP, a reasonably straightforward change.

December 21, 2017

Sears should not be the Canadian Press 2017 Business News Story of the Year.

The failure of Sears has ignited a firestorm of concern across Canada, largely based on the cavalier and cruel treatment of employees and pensioners. As a result more and more people are questioning current pension protection under Canadian law and are recognizing that legislative change is required.

Sears should not be the Canadian Press 2017 Business News Story of the Year because Sears is not unique. Nortel, Wabush Mines, Indalex, Grant Forest products, and many others came before Sears. They all left pensioners with reduced pensions and created hardships that put taxpayers on the hook for increases in government social services costs.

Sears stands out because they were far more effective at paying owners billions and executives millions, while leaving an underfunded pension behind. Worse still, Sears provides a great roadmap for other companies to follow. Unless the federal government takes action, it is only a matter of time until the next Sears occurs.

Make no mistake. What these companies have done is legal. Companies are focussed on maximizing financial returns to the benefit of owners; it is their fiduciary responsibility. No one should be surprised, then, that companies take full advantage of existing legislation to meet their goals.

Governments have known of the weakness in the legislation for years, and have not addressed it. There are solutions but governments have not adopted any. Had governments made the changes after Nortel, Sears’ pensioners would not have been left behind, Sears would not have been the Canadian Press 2017 Business News Story of the Year.

Both the Bloc Québécois and the NDP have introduced private members bills. Journalists, not often on the same side of any issue, and a broad spectrum of media from the right through to the left have published articles, opinion pieces and editorials in support of legislative change to protect pensions.

Despite these broadly held concerns the Federal government remains largely silent. Their current position on this issue is woefully inadequate. They have declared that the issue is complicated, and are open to looking at proposals, but so far have taken no substantive action. It appears the government has no solution other than to direct people to taxpayer funded services. The office of the Minister responsible, Minister Navdeep Bains, has stated only that they connect Sears employees with government services.

If we want different results, we need different legislation.

In 2008, the Conservative government enacted the Wage Earners Protection Program, which granted super-priority status to current year normal pension contributions, joining other super-priority obligations including wages and commissions earned and not paid. This was excellent legislation; it just didn’t go far enough.

Pensions are deferred wages; monies earned but not paid. They should be protected in full.

The Canadian Federation of Pensioners, CARP and many others believe the best solution at this time is to extend super-priority status to the entire pension. The two private members bills introduced are built on this concept.

Super-priority moves pensioners from near the back of the line to near the front. It keeps the financial responsibility for the pension commitment where it belongs, with the commercial interests of the company. Not the taxpayer.

Silence from the federal government signals their acceptance of the status quo. Waiting for the next Sears.

That is unacceptable.

Michael Powell

Incoming President

Canadian Federation of Pensioners

December 19, 2017

GENMO 2017 End of Year Message

We should all try to forget the terrible weather we had this summer and remember the glorious fall weather. Whether you head south for the winter or simply bundle up, embrace the weather.

The Province of Ontario recently passed bill 177. Included in this bill are changes to the Pension Benefits Act (PBA) that will allow companies to fund their pension obligations at 85% instead of 100%. Most pensions are currently funded at 85%. As the PBA has no negative consequences for underfunding pensions, we fear that the new norm could be funding 85% of the 85%.

The new funding rule is a $1.5 Billion gift to the companies. All risk is on the pensioner. As a carrot for the pensioners, the Pension Benefit Guarantee Fund (PBGF) will increase from a maximum of $1,000 to $1,500. Not only is this inadequate, General Motors retirees will NEVER be eligible to collect due to PBA Reg. 321-09 which was part of the 2009 bail out agreement.

On a positive note, GENMO’s Mike Powell has been elected as the new President of the Canadian Federation of Pensioners (CFP) and will remain as Vice President of GENMO. Mike has nurtured a positive relationship with CARP which is now aiding us in reforming the Bankruptcy Insolvency Act and CCAA. As the SEARS retirees have become the new pension disaster poster child, Mike and CARP are very active politically and with the media to give pension deficits “super priority” in bankruptcy. The struggle continues.

The GENMO executive wishes all members a very merry Christmas and a Happy New Year. Don’t forget your 2018 membership renewal. Thank you if you have already paid your membership fee. We can’t protect your pension without your support.

When employers go bankrupt, their current day misfortune can effectively reach back in time and undermine the accumulated pensions of their past employees, rocking the foundation built during working years to ensure financial stability in retirement.

If a business goes under while its pension plan is underfunded, pensioners end up losing part of the defined benefit pensions they worked a lifetime to obtain. This scenario has played out many times, with Sears Canada’s employees being the latest victims. It isn’t fair, and the situation is about to get worse.

Today, of the $246 billion in total liabilities for Ontario-regulated private sector defined benefit pension plans, $54 billion are unfunded. This week in Queen’s Park, the government is preparing to relax the rules for funding pension plans even further, allowing an additional $33 billion of liabilities to be unfunded, which will lead to more — and deeper — plan underfunding.

The idea is to help Ontario employers save by decreasing their obligation to fund their pension plans. But this saving is at the expense of the security of Ontario pensioners.

There’s a mechanism in place called the “Pension Benefits Guarantee Fund” (PBGF), designed to at least partially protect pensioners whose plans are wound up when underfunded. It chips in enough to ensure that the first $1,000 per month that is owed to a pensioner gets paid. Any pensioner entitled to more than that? Out of luck.

The $1,000 limit, put in place 37 years ago, when the PBGF was initially established, is proposed to increase to $1,500. Well and good, if a little late: Considering the inflation that took place in the 1980s, an increase to $1,500 should have kicked in around 30 years ago. Better late than never, and of course any increase is helpful to pensioners.

However, before back slaps and high fives are exchanged, it is important to remember that, even at $1,500 per month, many Ontario pensioners are left exposed to pension losses. In addition, indexation provisions – which can be 25% of the value of a pension – are lost. That is not the commitment that was made to these pensioners.

There is a solution that would ensure that Ontarians’ pension security is not made more precarious by the proposed changes to pension funding rules: Cover all Ontarians in this situation, without exception, by not limiting the PBGF.

But, wouldn’t this be very expensive? Who would pay? Reasonable questions. Since its implementation, employers with defined benefit plans have paid fees to support the PBGF. The increase in fees needed to remove limits from the PBGF is only a small fraction of the savings that these same employers will enjoy when the government relaxes the pension funding requirements.

The Canadian Federation of Pensioners (CFP) estimates that fraction to be approximately 5%. Consequently, the net effect of the proposed pension funding changes and elimination of the PBGF cap combined would still be a substantial savings to employers — conservatively estimated by the CFP to be well over a billion dollars a year.

Any relaxation of pension funding rules should be accompanied by this simple change to the PBGF. It’s a win-win solution for employers and pensioners: Employers will realize substantial savings; pensioners will finally be assured that the pension commitments made to them will be honoured and their pensions truly protected.

This simple fix comes at no net cost to employers, and no cost at all to taxpayers. The time to implement it is now, as part of the current round of changes. Both opposition parties support it. The ball is in the government’s court.

— Bob Farmer is president of the Canadian Federation of Pensioners, an association of pensioner organizations dedicated to enhancing the security of defined benefit pension plans. The member organizations of CFP represent the pension interests of 250,000 plan members across Canada.

GM Canada completed an actuarial valuation of our pension plan for December 31, 2016 even though a previous one was done for September 1, 2016. No new AV was needed until September, 2017 but there were several reasons for doing so. One reason was to make the report for the end of a calendar year as the plan's various assets are usually reported quarterly. The September 1st date made calculations difficult. The other reason was to take advantage of increasing interest rates which would allow the discount rate to move upward, thus lowering the pension plan liability.

Our plan's windup ratio increased from 86.1% to 89.9% mainly because the liabilities decreased by $132M in this four month period. The discount rate assumption had been increased by .5% by the actuaries. The assets decreased by $63M. The hourly plan windup ratio increased by 4.0% to 84.3% and liabilities decreased by $791M. The overall net decrease in liabilities was $923M.

GM Canada's minimum payment in 2017 is $85M for our plan and $476M for the hourly plan for a total of $561M. If the September 1, 2016 AV had been used their annual payment would have been $615M.

The return on assets, net of all expenses, was 3.6% per annum for this period.

There is pending Ontario legislation which would allow a company to fund their pension plans at an 85% solvency level. In a previous email we suggested that GM would not be eligible for this funding relief due to regulation 321-09 of the Bailout Agreement in 2009, but we were wrong; GM would be allowed to fund at an 85% solvency level similar to all defined benefit plan sponsors in Ontario. Since our plan is above that amount on a solvency basis (90.0%), GM would have a funding holiday. This legislation definitely favours the companies but the carrot that the government dangled in front of the DB pension plan members is that the Pension Benefit Guarantee Fund would be increased to $1500 from $1000. GM's salaried and hourly pension plan members are not eligible though as we unjustly excluded. Because the regulation lapsed in 2014 GENMO is endeavouring to have the provincial government include us again. We will keep you aware of this legislation's progress.

In the wake of recent bankruptcy protection and restructuring issues affecting companies such as Stelco, Sears and others, it has become increasingly obvious that retirees need to be protected. As we’ve mentioned many times previously retirees cannot recover from pension reductions as can financial institutions and suppliers and most other creditors of companies. GENMO’s focus has been on changes to the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA) to help all retirees in Canada, including ourselves.

We have another opportunity to make the federal government aware of the need to make changes. A petition to the House of Commons which ‘calls upon the Government of Canada to reform the Companies’ Creditors Arrangement Act so that supplemental pension plans are treated as priority creditors in the event of a corporate bankruptcy or restructuring’ has been created. The government must respond within 45 days. There is nothing binding in the petition but it does create greater awareness of the issues by those empowered to make changes.

Please respond to the petition by November 18, 2017 by using the following link:

Mike Powell’s Letter to Editor in response to Globe and Mail Article on Sears Pension Plan

There are a few points in this article that need clarification. It is all too often that editing to save space leads to a lack of clarity.

First is the statement that Sears was injecting "make-up payments". This makes it sound as if Sears was on its own initiative trying to make up the pension shortfall. The Ontario Pension Benefit Act (OPBA) requires companies to make up their pension deficits over time. Sears was merely making the minimum contribution legally allowed under legislation that is woefully inadequate, in Sear's case resulting in a $267 million deficit. Unfortunately there is nothing in the OPBA that requires a company fully fund their pension.

The second is referring to pensions as a "promise". The Supreme Court of Canada ruled pensions are deferred compensation. Earned every minute worked 20, 30, 50 years ago. Essentially, but not legally, a trust that the company commits to and the governments ensure. Reducing the monthly pension of a retiree is to reach back to the first day they worked and take away a little of what they earned that day and every other day. How many executives have had their past bonuses clawed back? None, in fact the executives that lead the company to insolvency get retention bonuses to stay on.

There are others, but the third is that " this is an uncommon occurrence". Nortel was mentioned but there are many others. Stelco, Indalex, Wabush Mines, Algoma Steel are but a few examples of companies who were able to compromise the future of their pensioners through bankruptcy or restructuring.

Globe and Mail Article- Sears Canada has given us reason to be thankful for inferior pension plans (Rob Carrick)

Apparently, Sears Canada can’t interest you in kitchen appliances, golf pants, tube socks, luggage or any of the other miscellaneous items found in its stores.

Now, what about defined-contribution pension plans? The struggling retailer, now under court protection from its creditors, has done a great job lately of selling people on the attributes of this second-best type of pension plan.

The best pensions are defined-benefit plans, although the Sears Canada story suggests it’s time for a rethink. If you have a DB pension, you need to find out how solid it is and adjust your retirement-savings level as required. If you’ve got a DC plan, let Sears Canada demonstrate a big advantage of this type of pension plan.

A DB plan, ideally, offers preset payments for life based on your years of service and salary level. But as Sears Canada has shown, a DB pension can only deliver in full if your employer is financially healthy enough to fund the plan properly.

With a DC plan and similar group registered-retirement savings plans, you save for retirement with contributions from your employer. On leaving the work force, it’s up to you to convert your savings into retirement income. DC plans expose you to stock-market crashes, investment fees, bad decision-making and more. Where they beat DB plans cleanly is in giving you property rights.

Keith Ambachtsheer, president of pension consultants KPA Advisory Services, says property rights in the pension world boil down to this: “Whatever you’re being promised, is it really your property? Or, is it someone making you a promise that’s uncertain.”

A DB pension, even offered by a solid entity like a government or blue-chip company, can never really be your property and a DB plan from a shaky company like Sears Canada is even more tenuous. But a DC pension, with all its drawbacks, is truly your property.

Sears Canada now offers a defined-contribution plan, but it maintains a defined-benefit plan for retirees and long-serving employees. Mr. Ambachtsheer says corporations started offering defined-benefit pension plans in the 1950s, a time of great optimism about the long-term prospects for corporate profits and investment gains. In the 1990s, companies started to realize that DB pensions were a drag on both profitability and flexibility.

Quite a few companies today, Sears Canada among them, have DB pension plans that are underfunded. This means that if the company were to be wound down, there wouldn’t be enough money in the pension to pay the full amount expected by current and future retirees.

Sears Canada has been injecting what Mr. Ambachtsheer calls “make-up payments” into its DB pension on a monthly basis. But the company’s restructuring plan calls for these payments to be made only until Sept. 30. With the Sears DB pension underfunded by roughly $267-million, this is a real concern for people who currently receive retirement benefits or expect to in the future.

The risk is that retirement benefits in the DB plan would have to be reduced from what employees have been expecting. Mr. Ambachtsheer says this is an uncommon occurrence in the DB pension world, but it has happened. Nortel Networks is one example.

Public-sector DB pensions are the safest of their kind because governments can raise taxes to meet their obligations. If you have a corporate plan, go to your HR department and ask for documentation on the plan’s funding level. Mr. Ambachtsheer said DB plans are subject to a periodic actuarial analysis. “You need to be aware of the funded status of the plan and the financial strength of the corporation behind the plan,” he said. “Those are factors people should be aware of.”

Vigilance is required with defined-contribution pensions, but in a different way. You need to ensure you have a sensible mix of low-cost investments working for you, and that you’re maxing out on matching benefits from your employer. On retirement, you must recalibrate your whole investing plan as you stop accumulating money and start spending it in the form of retirement income.

“The positive side of a DC plan is that people have clear property rights,” Mr. Ambachtsheer said. “They own units in that plan – no one can take them away.”

072417

Status of Salaried Pension Plan- September, 2016 Actuarial Valuation

Dear GENMO member:

General Motors recently provided us with information regarding the status of our pension plan. It was quite brief and showed the going concern ratio of 95.2% and the transfer (windup) ratio of 86.1% without providing much interpretation or other hard data. It was totally inadequate based on the importance of the pension for us but probably meets FSCO requirements.

The going concern ratio is if the company was to continue in perpetuity. We would be wise not to put much importance into that number as happened back in the 1990’s when the Too Big to Fail legislation was enacted. A number of companies took advantage in order to underfund the plan on a solvency basis and later failed; those retirees were quite hard hit by reduced pensions.

The windup ratio is, as mentioned, the ratio of the plan assets divided by the plan liabilities. There are several scenarios whereby the plan could be wound up. The company could decide to fully fund the plan and wind it up, but this is unlikely as both the hourly and salaried plans are underfunded by a total of $2.7B (salaried- $412M, hourly- $2,317M). Or, a company could be forced to wind it up under the provisions of CCAA where the pension plan is at the bottom of the creditor list. This does not normally work out well for the pensioners as seen on the news lately with Stelco and Sears.

At present, Ontario companies are required to fund the plans toward a 100% target but there is pending legislation to allow sponsors to fund to 85%. As we’re already above this goal, it might allow GM Canada to have a funding holiday. Although the purpose of the legislation is to provide a benefit to the companies, it hurts pensioners who have little protection within the CCAA process as it allows the funding to be significantly lower. We believe that GM Canada will be excluded because of provisions of the 2009 bailout agreement, Ontario Regulation 321-09, and will be required to fund towards 100% solvency.

In the past year our plan’s transfer ratio increased from 85.4% to 86.1%. The hourly plan is 80.3% funded, up from 78.3%. Neither plan is where we’d like it to be but both are moving in the right direction in case some calamity was to occur.

We used to believe that our pension plan would be 100% funded by 2019 as the initial regulation dictated funding requirements in 2009 for a 10 year period; in 2014 it indicated five years. But that was for the funding of the existing deficits. Each year the plan, as calculated by the actuarial valuation, has come up with new deficits which had their own five year terms. Right now there are amortization payment requirements through August, 2022 with the present value of these payments being $408M. Note that the hourly plan’s amortization payment present value is $2,129M.

GM Canada’s minimum payment to our plan from Sept 1, 2016 to Sept 1, 2017 is $103M; plus it has to pay at least $512M to the hourly plan. At a meeting last year GM executives told us that the pension plans are fully funded from auto sales in Canada. GM sold about 270,000 vehicles here in 2016; sales are up by over 20,000 for the first six months this year. The 2016 charge per vehicle just for pensions is about $2200. We don’t know which bucket pays for our benefits.

Several other interesting facts: plan assets- $2,536M (up from $2,521M), rate of return on market value of assets net of all expenses- 7.1%, number of retirees and surviving spouses- 7,059, average age- 75.6, payments to pensioners-$175.5M

STELCO : A clear and frightening example of what CCAA can mean to pensioners

We have followed the latest Stelco restructuring under the Companies' Creditors Arrangement Act (CCAA) for some time now, and have reviewed the status with you at our Annual General Meetings.

On June 19, 2017 the judge approved the settlement plan. This released the members of STEL Salaried Pensioners Organization from their non-discloser restrictions. STEL is the GENMO of Stelco and in fact were very helpful as we were establishing GENMO, and like GENMO are members of the Canadian Federation of Pensioners. Through STEL we received a copy of the new pension regulation that detail what will happen to their pension. It is Ontario Regulation 255/17 if you want to look it up.

What you will read below simply points out why super-priority for pension unfunded liabilities in CCAA and Bankruptcy and Insolvency (BIA) is essential to our pension security.

You will read in the media that the Stelco pensioners will receive 100% of their pensions; what could be wrong with that? The fact is they will initially receive 100% but it is not guaranteed forever. How could it be?

The math is pretty simple. The pensions are underfunded by $850 million. The new owner, Bedrock, negotiated the deal so they have no ongoing responsibility for the pension. Bedrock has promised to contribute $160 million over the next 15 years. In addition if Stelco's land holdings in Hamilton and Nanticoke can be sold for a profit, the pension will receive a portion, however the land is an environmental nightmare with little to no value.

Without some miraculous set of market conditions the solvency ratio of these pensions will decline. The settlement plan requires the pension be wound up when it reaches a solvency ratio of 85% of the current solvency ratio. When that happens the Stelco pensioners will receive a reduced pension; likely in the 65 - 70% range.

What this plan does is buy time to manage the bad news. Right now the story is pensioners receive 100%. Some number of years from now, when the pension reaches the threshold and is wound up, the Stelco CCAA will be old news and forgotten.

STEL was able to share other information about the Stelco CCAA that was frankly scary and included elements that surprised us.

Stelco, through their restructuring process (from filing on September 16, 2014) was profitable. In fact as of the settlement date after paying out close to $200 million in restructuring costs, Stelco had amassed $200 million in cash. The latest reports suggest that Stelco now has $250 million in cash. So since September 2014 Stelco has made in excess of $400 million profit. Clearly, the belief that a company has to be insolvent and losing lots of money to file CCAA is incorrect.

Stelcos salaried retirees were not recognized by the court, even though in the previous 2004 CCAA they were. This meant that the salaried retirees’ legal fees would not be covered this time (as they were in 2004). If they wanted to be represented as a unique group, the Stelco salaried retirees would have to fund their own legal fees, but they didn't have the funds. The court did group the salaried retirees with other interested parties and covered the legal costs of that group, but those other parties had different priorities. The salaried retirees’ voice was not heard. This surprised us as we were under the assumption any legitimate group would be recognized by the court and have their legal costs funded from the assets of the company. Now we know that isn't true. It is fortunate we have a healthy bank account that would allow us to fund our own legal expenses if the need arises.

The priority for GENMO and the Canadian Federation of Pensioners at the Federal level is to expand super-priority to the pension deficit as the single most effective change to improve pension security,

As we have pointed out Canadian legislation allows, perhaps encourages, companies to restructure under the Companies' Creditors Arrangement Act (CCAA). This “act” provides no protection for pensions.

In Sears Canada's case, they were able to sell off their valuable assets such as the credit card business ($2.2 billion) and leases for their most desirable locations ($400 million).They paid special dividends to their hedge fund owner and left the pension underfunded. In 2013 Sears Canada doubled the compensation of the top five executives (to $4.8 million) and left the pension underfunded.

Under the CCAA this is all water under the bridge. Companies can and do pay their executives significant bonuses and reward shareholders with special dividends as the company spirals to failure. By the time the CCAA is filed assets are drained and the underfunded pension is left underfunded.

Pensions are reduced, often benefits are lost. Pensioners pay the price.

This is another example that highlights why “super-priority” for the unfunded pension liability in restructuring and bankruptcy is so important. This is why GENMO and the Canadian Federation of Pensioners continue to be very active with MPs and the Federal Government. This change would put the pension deficit near the top of claims to be settled and would require companies to fulfill the pension commitment they made to their employees.

We feel that the welfare of vulnerable pensioners is more important than junk bonds and hedge funds.

GMCC UNIFOR Agreement

Dear GENMO Member,

GMCC and UNIFOR have reached a contract agreement which includes a promise of new investment and product for the Oshawa Car Plant and the St. Catharines Engine/Transmission Plant.

This is good news for all GMCC hourly and salary employees and retirees.

Renewed investment in these plants helps keep your pension and benefits secure into the near future.

This is good news for the citizens of Ontario; particularly Oshawa and St. Catharines.

This is great news for GM Corp. as they will still be receiving excellent product from their world class Canadian facilities.

The agreement will have GM invest $ 400 million in Oshawa to build heavy duty trucks as an overflow plant by 2018. GM will invest $ 150 million in St. Catharines to refurbish tooling for engines and a new generation transmission.

GMCC will still be providing funding for your pension as defined by the Pension Benefits Act. There will be no difference in the funding regulation between the hourly and salary plans; GM has five years to repay each of the plan’s annual deficits. Our concern is that together, the salary and hourly pension plans have a deficit of approximately three billion dollars.

An article in the Globe and Mail suggested that GM vowed to wipe out the pension deficit; however, David Patterson GM Canada VP Corporate and Environmental Affairs, advised that supplemental funding was not planned. He stated ‘The funding of our defined benefit plans will be on a solvency basis pursuant to Ontario law and requirements’.

GENMO will continue to work with the Canadian Federation of Pensioners to reform the federal BIA and CCAA to protect pension deficit in bankruptcy for all Canadians with private defined benefit pensions.

Re�A pension plan for the next generation�(June 18): Let�s not forget the pension elephant in the room: private defined-benefit pension plans. While the news media and governments debate the need for improved income security for seniors, the focus is on the �shiny new toys� � expanded TFSAs, pooled registered pension plans and enhanced CPP.

Meanwhile, the 1.5 million Canadian families who are dependent on private defined-benefit pension plans are left exposed to potential financial disaster. Companies who choose to file for restructuring or bankruptcy can and do abandon their pension obligations, resulting in significant pension reductions and loss of medical benefits for plan members.

Pensioners have little or no ability to recover these losses. They shift from contributing to the tax base to consuming tax dollars through expanded need for social services.

The pension deficit should be given superpriority in the Companies� Creditors Arrangement Act and the Bankruptcy and Insolvency Act. Owed wages and current pension obligations are superpriorities, the pension deficit is not. This is despite the fact the Supreme Court of Canada in IBM Canada Ltd. v. Waterman ruled that pensions are deferred compensation, not a benefit.

Private defined pension plans need an effective legislative backstop that ensures pensioners receive the pension their employers committed to. A backstop that doesn�t require any public funds is the financial responsibility of the companies.

GENMO recently received the latest Actuarial Valuation of our salaried pension plan.� This report comprehends the status of the plan as at September 1, 2015.

The plan�s assets are worth $2,597M while last year they were worth $2,457M.� The rate of return earned on the market value of assets for the past year was 10.5%.� GMCC has attempted to de-risk the plan by investing conservatively and getting involved in hedging.� The target asset allocation is 40% return-seeking assets (such as equities and real estate) and 60%fixed income (such as long term bonds).

Despite these impressive returns the plan experienced a solvency deficiency of $177M in 2015.� As per the Pension Benefits Act, GM Canada has until 2021 to repay this shortfall.

The hypothetical windup liability creates a deficit of $437M as the plan is still considerably underfunded.� The Transfer Ratio (assets/liabilities) is .85 which is improved from last year�s .82.� This would mean that if the plan were wound up our pension payments would be reduced to about 85% of what they are presently.

The total deficit of both the hourly and salaried plans is approximately $3B.�

As part of the bailout agreement, we were removed from the Pension Benefit Guarantee Fund.� This would have paid us, at the present Transfer Ratio, $150 per month.

The $4B of government funds received in the bailout by GM Canada that was used to prepay pension contributions as a Prior Year Credit Balance is gone.� Now GM Canada has to fund the entire pension contribution from current operations.� The annual pension payment for both plans now is nearly $700M which is considerably higher than the company�s previous annual payment of $200M.

We are concerned because without production in Oshawa, GM Canada may not have the revenue to support these payments.� Other companies, most recently US Steel Canada (formerly Stelco), have used CCAA regulations to seek bankruptcy protection and reorganize.� This process allows a company to become economically viable again while shedding costs.

With our AGM coming up on May 26, 2016, and following up on our email of March 29 we have some very good news on our fight to protect pensions in the event companies choose to restructure or declare bankruptcy.

We wanted to update you on GENMOs activities in the past few months and again thank you for your continued support.

The security of our pension is our primary focus.� We are part of the 1.5 million Canadian families that depend on their private defined benefit pension for their income security.� Security at risk due to weak Provincial and Federal legislation.

With the recent Federal election we have been concentrating on meeting with the new, generally Liberal, MPs.

To date our meetings with the new Liberal MPs have been very encouraging. So far they have all been receptive to our message and supportive.� We have reviewed our concerns with, and changes we would like to see in the Corporate Creditors Arrangement Act (CCAA) and Bankruptcy and Insolvency Act (BIA).

To refresh your memory the two acts are quite different and require unique changes.

We have already made the case that pensions should be protected in CCAA or BIA actions.� Pensions are accepted as deferred income.� Unlike all other stakeholders of a company and unlike their own personal investments, pension plan members have no ability to manage the risk associated with their pension; their income security. Close to 80% of pensions regulated Federally and in Ontario are underfunded. Plan members only protection is current legislation.

The BIA is a very structured process. The change required is to modify the priority of settlement to improve the standing of pension deficits. Most provinces have Deemed Trust provisions.� A deemed trust recognizes that companies have financial obligations and that these obligations should be addressed before settlements to other stakeholders. Unfortunately, deemed trusts are not recognized in Federal legislation. Therefore the BIA should be changed to ensure pension deficits are addressed in bankruptcy as a deemed trust would be; immediately after debtor in possession claims.

The CCAA allows the courts a great deal of flexibility. The focus of the courts is to prioritize preserving something of the company as an ongoing enterprise. On the surface this seems a noble and justified approach. However, allowing companies to ignore pension deficits is fundamentally unjust.� The CCAA should be changed to require the courts to address and resolve any pension deficits in any action as part of the Plan of Arrangement.

We have mapped our membership to the ridings they live in. This provides a list of MPs to focus our efforts on.

At a national level, GENMO members are in 218 ridings; 117 Liberal, 66 Conservative, 29 NDP and 6 BQ. ��Not surprisingly our members are primarily in two provinces; Ontario (86.8%), and Quebec (7.2%).� They are concentrated in five geographical areas. Using the GENMO membership data to extrapolate both hourly and salary retiree populations by geographical area reveals the following:

Oshawa 46.5% of our members 22,320 total GM Canada retirees and 11 ridings.

1-��� Several members have complained to us at info@genmo.ca that their prescription drug co-pay was higher than the agreed amount ($2.00).� As you may be aware, the dispensing fee is covered up to $11.00 by our plan .� Shoppers Drug Mart�s fee is $11.99 so the difference is added to the co-pay amount.� We have asked that their fee be reduced to $11.00 for our retirees but have not received a response.� If the fee is higher than the normal co-pay amount, you should ask the pharmacist to have it reduced to the $2.00; one member had his co-pay eliminated entirely.� There is a great disparity in dispensing fees.� A survey in Oshawa showed: Costco $3.89 (seniors $1.89), Walmart $9.97, Loblaws $10.49, Shoppers $11.99

2-��� Green Shield Canada revised their Secondary Coordination of Benefit Calculation for Drugs policy last September.� This change would affect spouses where one has a health insurance plan which is not Green Shield.� They advised �If the drug claim was previously processed by another insurance/health benefit carrier, and the pharmacist submits the remaining amount to your GSC drug plan, GSC will reimburse the pharmacy up to the eligible amount�.� See following example:

A plan member fills a prescription at a pharmacy and the claim is submitted to the primary plan for $120,�

The primary plan pays $80

The GSC drug pricing file has an eligible price of $100 for this drug

The pharmacist submits the remaining $40 to GSC as secondary plan

GSC as secondary plan pays $20 (the difference between $100� and $80)

The excess $20 amount will no longer be reimbursed by GSC��

If this is a problem for you, it might be wise to use GSC as the primary plan and then go to your other carrier to see if it will pay the difference. � �

Your GENMO Executive � � � � � � � � � � � � � � � ��

Fran�ais ci-dessous

The following appeared in the November 3, 2015 edition of the Auto Info, a publication from the Oshawa Car Plant.

�Leadership Message from Steve Carlisle- General Motors of Canada Company

I�d like to update everyone on a minor change to our company name that will happen over the next month. I want to ensure you�re not surprised if you see it, and also let you know why it�s happening.� I also need your help with a few items.

Effective November 23rd, 2015, General Motors of Canada Limited will be changing its name to General Motors of Canada Company and will be making adjustments to its corporate ownership structure.� These changes are part of an overall alignment of General Motors� international operations to drive corporate efficiencies in this increasingly global environment.

This corporate reorganization does not materially change General Motors of Canada�s obligations, operations, business relationships or public commitments.� The change is one part of a wider General Motors international structure organization that also involves GM�s Europe and Mexico entities.� This reorganization has no impact on our optimistic outlook for our operations in Canada.

We will continue to refer to �GM Canada� as we do today; it may be referred to as �GM Canada� or �GMCC� in agreements and publications.� The GM Canada logo will remain unchanged.

The new GMCC will remain an indirect, wholly-owned subsidiary of General Motors Company.� Members of the project team will be reaching out across the organization to assist with various aspects of the name change.

Steve Carlisle

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We will be investigating what these changes mean and how they might affect GMCC�s pension and benefit obligations for its salaried retirees.

You should have received a letter from GMCL the week of August 2, 2015 titled �Pension Plan Funding Progress Report� dated June 2015. As per the regulation of the Ontario Pension Benefits Act (PBA) the plan sponsor (GMCL) must communicate the status of the plan every year if the plan is less than 85% funded on a solvency basis; as is the case with our plan.

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The good news is that the pension is in better condition than last year. The wind up ratio has improved to 82%; however the information dated September 1, 2014 is almost one year old. A lot can happen in a year.

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GMCL has made some funding claims and has attempted to explain �Option 3 Status and Funding�. We want to simplify the explanation.

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In 2009 GMCL did make a $720 million prepayment into our plan using a monetary tool known as a Prior Year Credit Balance (PYCB). This was NOT a top up to the pension but rather more like a bank account that GMCL could draw on to make about 80% of their regular pension plan payments. The remaining 20% came out of GMCL revenue. The $720 PYCB did not increase funding and lead to better funding levels. It provided GM with an instrument to reduce the strain on its revenue from 2009 until the PYCB reached $0. This money (PYCB) was part of the Provincial and Federal bailout agreement.

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GMCL points out that Option 3 was a short term modification to the Pension Benefits Act allowing companies to repay annual pension deficits over 10 years rather than 5 years.� What GMCL does not point out is that Option 3 required the company to canvas all plan members and if more than 30% did not agree, the company has to revert to the standard 5 years.� The Ontario Government and GMCL negotiated a special deal to avoid communicating with us.� The salaried plan members were never asked; GENMO would never had supported it.

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GMCL claims that using �Option3� �leaves GMCL with more capital to use in the business�. Despite repeated attempts by GENMO to confirm allocation, to our knowledge, none of this capital is for new product in Oshawa or St Catharines.

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�We applaud GMCL for committing to make their PBA required contributions to our pension plan going forward. We are cautiously optimistic that the plan will approach full solvency. With no future product commitments in Oshawa or St Catharines, we are concerned about where GMCL will find the revenue to meet their pension commitments.

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GENMO continues to meet regularly with the pension regulator FSCO and the Ontario Finance Ministry to communicate our concerns to protect your pension and interests.

GENMO became a non-profit corporation in January 2009. At that time we knew we would require funding for any eventualities that would require us to retain a legal firm such as SGM. Initially we asked for an annual membership fee of $25 plus $25 for initiation. As time went on and legal fees continued to increase your fee went up to $75.

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Without your financial support we never would have won our benefits lawsuit (O�Neill vs. GMCL).

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As a part of the settlement, GMCL has reimbursed GENMO for all of our legal costs pertaining to the lawsuit. We are now in a very stable financial situation for any future litigation dealing with benefits and pension issues.

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Due to our financial stability, the GENMO executive has decided to give members who have paid their 2014 membership fees a �membership fee holiday�. You will be receiving a letter in November with a self addressed return envelope. We want you to fill in and mail your 2015 registration as you do every year, but you will not have to send in any money (fees).

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New members will pay a $25 membership fee plus $25 initiation.

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Going forward, we will decide on an annual �fee� requirement that is dictated by the circumstances at that time. Remember, we will always have ongoing costs.

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A full financial accounting will be given at our next AGM in May 2015.

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Once again, thank you for all of your support.

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Your GENMO Executive

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Lynn McCullough GENMO Resignation

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Dear GENMO Member,

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Lynn McCullough, the GENMO Director of Legal and the Representative Plaintiff in the �O�Neill vs. GMCL� benefits lawsuit has resigned his position as a GENMO executive effective September 10, 2014 due to personal reasons.

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We all owe Lynn a great debt of thanks for the countless hours he spent on behalf of the 3,200 class members and the successful outcome of the lawsuit. Lynn�s efforts and strength are the main reason we were so successful.

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Lynn also was key in representing the interests of all GENMO members, including those not in the class, in both benefit and pension issues.

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Lynn will still remain as the class Representative Plaintiff.

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Mike Powell (GENMO VP) will take on Lynn�s duties as the Director of Legal.

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Please join us in wishing Lynn all the best as he gets on with his life and enjoys a healthy and happy retirement.

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Your GENMO Executive

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MONTHLY HEALTH CARE CONTRIBUTION- TAX SLIP (T4A)

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Your �monthly healthy care contribution� amount is not shown on the tax slip (T4A) from GMCL.� We attempted to have this included but GMCL claims that it cannot be done, although other auto companies itemize it.� If you require this information to use as a medical expense when preparing your income tax form please contact the GM Canada Benefits Centre at 1-877-442-4625.

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Your GENMO Executive��

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�� GENMO 2013 � THE YEAR IN REVIEW

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�This is a brief summary of the GENMO Organization�s activities and accomplishments in 2013.

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� GENMO�s most significant achievement was the successful outcome of the Class Action Law Suit �Joseph Michael O�Neill and General Motors of Canada Limited.� GMCL appealed Justice Balobaba�s decision.� The date of the Appeal is June 12, 2014.

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The Class Action law suit, was heard in The Ontario Superior Court of Justice on May 27, 28 and 29th.�

As you may be aware General Motors of Canada appealed the Ontario Superior Court decision of Justice Belobaba which ruled in favour of most of our issues.� We cross-appealed on the few remaining items in dispute.

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Our case will be heard in front of the Court of Appeals for Ontario on March 18, 2014 at Osgoode Hall.� In this one day proceeding three judges will hear our case.� It is expected that it will take four to six months for a decision to be released.

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A somewhat similar case, Lacey verses Weyerhaeuser, in British Columbia was decided in favour of the retiree (Lacey) by the B.C. Court of Appeal back in May, 2013.� Although Weyerhaeuser wanted to appeal this to the Supreme Court of Canada, the court recently denied their leave to appeal; consequently, the BCCA decision is final.� This could have a major influence on our case.

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P.O. Box 82555,

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Oshawa, On L1G 7W7

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August 7, 2013

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To: Mr. Kevin Williams

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President and Managing DirectorGeneral Motors of Canada1908 Colonel Sam Drive

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Oshawa, Ontario

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L1H 8P7

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cc: Mr. Jeff Rolfs

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Mr. Dave Courtney

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Mr. Williams,

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GENMO Salaried Pension Organization is a nonprofit organization that advocates on behalf of the approximate 8,000 members of General Motors of Canada Limited (GMCL) salaried pension plan.

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The specific purpose of this note is to request clarification from you about GMCL's plans to fully fund the salaried pension plan.

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Our members are very concerned that the wind up ratio of their pension plan has been deteriorating consistently, another 3% decline last year, while GMCL commits to make only the minimum contribution to the plan.� This at the same time as GM in the United States announced it was making a $900 million contribution to the US plan, even though no payment was necessary.

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GMCL has decided not to publish annual financial statements, so there is nothing in the public domain relative to GMCL's financial health.� However the following facts are in the public domain; General Motors is more profitable than ever (most profitable year ever was $7.6 billion in 2011), and that General Motors is selling more vehicles than ever, 9.2 million in 2012.

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For GMCL's performance, statements such as "We are focused on building a profitable business which has long-term viability, which is in the best interest of all of GM's stakeholders, including shareholders, employees, retirees, dealers and suppliers." indicate GM is doing well in Canada.

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My question to you is, given General Motors financial turnaround since 2009 and the backdrop of the $900 million contribution made to the US pension plan, what is your plan to fully fund the Canadian salaried pension plan?

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Brian Rutherford

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President

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GENMO Salaried Pension Organization

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�Dear GENMO Member:�

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Today, Justice Belobaba of the Ontario Superior Court of Justice found in favour of most of the members of the class action commenced against GM Canada.� The following is found on our law firm�s web site:�

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��Class Action Against GM Canada Succeeds�

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�On July 17, 2013, the Ontario Superior Court of Justice granted summary judgment in favour of 98% of class members represented by Sack Goldblatt Mitchell LLP in the matter of O�Neill v. General Motors of Canada Ltd, a class action commenced on behalf of salaried and executive retirees of General Motors of Canada Ltd. arising out of the reductions and eliminations to their post-retirement benefits over 2008-2010. �The class action was certified on consent in 2011 and the case proceeded to a motion for summary judgment on the issue of whether GMCL breached its contracts with the class members in reducing/eliminating their benefits. The court agreed with SGM that GMCL was contractually obligated to provide the promised benefits, and breached its contracts with the former salaried employees by reducing and eliminating those benefits. However, the court found that GMCL was permitted to reduce the benefits of a smaller number of executive retirees because their contracts contained different language. �The initial representative plaintiff, Joseph O�Neill, worked for GMCL for more than 40 years. Lynn McCullough, who became the representative plaintiff in 2012 after Mr. O'Neill passed away, worked for GMCL for 44 years. GMCL promised to provide the former salaried employees with post-retirement benefits, including healthcare and life insurance, in various documents provided to them over their careers. �In 1994, GMCL began including a �reservation of rights� clause in its benefits documents, which it claimed allowed it to �amend, modify, suspend or terminate any of its programs (including benefits).� Over 2008-2010, GMCL implemented a number of reductions to the post-retirement benefits, including the elimination of semi-private hospital coverage and a severe reduction in the amount of the basic group life insurance benefit. Some class members lost over $100,000 in life insurance coverage as a result of the reductions. �The court agreed with SGM that the benefits were provided to the employees as a matter of contract and as �deferred compensation� for class members� services to GMCL. The court further found that former salaried employees would reasonably expect that the benefits provided to them were secure and would continue for life, based on the promises in the booklets. In this context, the court found that the �reservation of rights� clause language was not sufficiently clear to permit GMCL to reduce the benefits after retirement, and that more explicitly language alerting employees to the possibility of reductions after retirement was required. �One third of the class retired early pursuant to early retirement agreements. The court agreed with the plaintiff that nothing in these agreements altered GMCL�s obligation to continue to provide post-retirement benefits, and found that GMCL breached the contracts of the former salaried employees when it reduced and eliminated their benefits. �With respect to the executive post-retirement benefits, the court found that the language in the benefits documents was much clearer in conveying that the benefits were not guaranteed and were subject to reduction. Accordingly, the court found that GMCL could lawfully reduce the benefits of executives after the point of retirement and had not breached its contracts with the executive class members in so doing. �The class members were represented by Steven Barrett and Christine Davies at Sack Goldblatt Mitchell LLP.� �We have not had a chance to study the decision in great detail but note Justice Belobaba felt that GMCL was entitled to reduce the CSERP benefit of executives.� Also we have to seek clarification of paragraph 105 where he concluded ��class members that have not prevailed are ..salaried retirees who continued to work after becoming eligible to retire and were working when the impunged reductions were announced��,� In paragraph 80 he wrote �I find that GMCL was not contractually entitled to reduce the health care and basic life insurance benefits after the salaried employees had retired.�� There is a timing conflict between these two paragraphs which our law firm will have to sort out. �Press here for the O�Neill v. General Motors of Canada decision or see "Class action Status". �Thank you very much for your support.� Unfortunately the fight is not over yet. �Your GENMO Executive �Brian Rutherford, Mike Powell, Jan O�Neill, JoAnn Stuart, Denise Cay, Doug McDowell, Garry Marnoch, Lynn McCullough, Alanna Lyczba

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GENMO AREA UPDATE MEETINGS �GENMO�s executives are trying their best to communicate with all members across Canada. Because of the nature of General Motors of Canada manufacturing centres, most salaried retirees are located in southern Ontario. We also have �chapters� located in Moncton, Ste Therese and in the west mainly in the Vancouver area. �Last September Lynn McCullough, Mike Powell and Garry Marnoch visited the Ste Therese membership and provided a pension and benefits lawsuit update, as well as a question and answer period. On March 20 Mike Powell visited the east coast membership in Moncton for a similar update. �In the Oshawa area Brian Rutherford gives a monthly 10 minute update at the GMCL Salaried Retiree Association meetings. �In April we will have update meetings in London on April 10 at 1:00 PM and in Windsor on April 11 at 10:00 AM. �In May we will be having the GENMO Annual General Meeting (AGM) on the 9th at 4:00 PM at the Regent Theatre in Oshawa and an update meeting in St Catharines on the 13th at 1:00 PM. �We have yet to set a date for an update meeting in the west.

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�We hope that all GENMO members in these areas are able to take advantage of the updates to your benefits and pension. Even though our economy seems to be slowly turning the corner, these are still uncertain times. We must remain vigilant.

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FEBRUARY 5, 2013 APPEAL

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GMCL�s appeal regarding the production of documents issues was successful. Justice E. Morgan accepted their argument that the minutes and financial statements were not �contractual� documents and therefore could not be included under the terms of the settlement agreement. This means that GMCL is not required to produce the minutes we have requested and it also means that we cannot rely on any of the minutes/financial statements we had included in a recent affidavit.

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However, we still feel that we have a very strong case and will move forward with our Plaintiff Factum (by�April 15) and Reply Factum (by May 15).�The court will hear our case on May 27 and 28, 2013.

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�Recent Court Hearings

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On December 20, 2012 we were in court to force GMCL to produce historical benefit plan documents and retain certain financial documents which we show in affidavits for our case.� �We believe that this information is important and relevant to our case.� Master Glustein found in favour of us.� He wrote "... I find in favour of O'Neill and order GMCL to produce corporate minutes and resolutions concerning the creation of the benefits plans at issue in the action.� Similarly, I dismiss GMCL's motion to strike the DiMartile documents."�� Also, "I dismiss GMCL's motion to strike the Financial Statements as evidence from the O'Neill affidavit."� (As you may know DiMartile is suing GMCL.)�� GMCL is appealing the judge's decision; this appeal should be heard this month or next.

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We were in court on January 16, 2013 seeking to have GMAC retirees, and several other individuals as well, included in our class action.� We were not successful as Justice Belobaba wrote "I agree with GMCL that the current class definition cannot reasonably be interpreted to include these non-GMCL retirees or GMCL retirees who retired after the end of the defined class period."� He reasoned regarding the GMAC retirees that they "entered into employment contracts with GMAC ......and not with GMCL.� They are not �retirees' of GMCL.� They have no contractual claim against GMCL."

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We will be working with GMAC retirees and other individuals who were not allowed into the class to determine the next course of action.

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CLASS ACTION SCHEDULE

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COMPLETION DATE

Plaintiff�s Record

August 20, 2012

Defendant�s Record

October 16, 2012

Plaintiff�s Reply Record (if any)

October 26, 2012

Plaintiff�s Factum

April 15,2013

Defendant�s Factum

May 1, 2013

Reply Factum

May 15, 2013

Motion Dates (in front of Justice Belobaba)

May 27,28 2013

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ALL SALARIED RETIREES AND ACTIVE EMPLOYEES MUST BE VIGILANT OF THEIR VESTED INTERESTS:

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General Motors Corporation has forsaken their Salaried Retirees in the United States. At age 65, retirees lose all of their meagre benefits except for their $10,000 life insurance policy. They are now losing their "defined benefit" pensions to a choice of a lump sum payment or an annuity with the Prudential Insurance Corporation. Active salaried employees were forced into a �defined contribution' benefit plan.� Seniors now have to become amateur actuaries to decide on what is best for them and their families. No matter what the choice is, they will lose. So much for loyalty and hard work; GM wants all "legacy costs" off of their books.

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General Motors Corporation has forsaken the Active Salaried Employees at GMCL. In 2013 the "defined benefit" pension will be grandfathered and a "defined contribution" pension will be unilaterally forced on them. Employees who retire after June 1, 2014 will lose all of their benefits at age 65. So much for loyalty and hard work; GM wants all "legacy costs" off their books.

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GMCL Salaried Retirees are suing the Company for lost benefits, including life insurance. Back in 2009, GENMO saw the writing on the wall and decided to push back at GMCL's never ending, unilateral benefit takeaways. GM wants all "legacy costs" off the books. Although the court case is progressing slowly, we feel very positive about winning the class action.

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From the GMCL Salaried Employees Actuarial Valuation as at September 1, 2011, provided by Towers Watson, the pension plan is 79% funded. Starting on September 14, 2015, GMCL has five years to fully fund the pension plan (September 1, 2019) as per Regulation321/09 of the Pension Benefits Act.

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At this time we do not know GMCL's long term plans for the current �defined benefit' pension plan for all current retirees. We do know that GM wants all "legacy costs" off their books.

GENMO Salaried Pension Organization is a not-for-profit corporation dedicated to promoting the protection of the pensions, benefits and other common interests of its members and surviving spouses. It is neither sponsored nor endorsed by General Motors of Canada.

Please understand that we SUPPORT GENERAL MOTORS and we encourage everyone to support General Motors and continue to be an advocate. It is in everyone's best interest for General Motors to succeed as a financially viable company.�

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We encourage you to visit GM Canada's website and examine their line of award winning products and services.

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About This Site

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Here you will find information about our goals, who we are and how we operate along with�ongoing information about your GM Pension and Benefits Plan status.

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This is a�new site and we are constantly adding information so be sure to visit often. Please send comments, questions and suggestions to info@genmo.ca.

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If you are a GMCL salaried retiree, a surviving spouse,or an active salaried employee, please join�us. We all need your support.